Volt Carbon Technologies Inc V.VCT

ASC imposes three-year ban, $90,000 order on Ogilvie

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ASC imposes three-year ban, $90,000 order on Ogilvie

2023-03-23 20:15 ET - Street Wire

https://www.stockwatch.com/News/Item?bid=Z-C:*ASC-3381957&symbol=*ASC®ion=C


by Mike Caswell

The Alberta Securities Commission has imposed $90,000 in sanctions and a three-year ban against former Saint Jean Carbon Inc. chief executive officer Paul Ogilvie. The ASC claimed that Mr. Ogilvie misled investors about a supposed agreement that Saint Jean Carbon had with Japanese manufacturing giant Panasonic Corp. in 2017. Mr. Ogilvie claimed to have a graphite supply deal, but there was no such arrangement, the ASC said.

The penalties for Mr. Ogilvie are contained in a decision that the ASC released on Thursday, March 23. His $90,000 sanction comprises a $60,000 administrative penalty and $30,000 in investigative and hearing costs. On top of that, the ASC has barred him from serving as an officer or director of any issuer for three years, and has ordered him to resign from any such positions that he holds.

The penalties arise from a news release that Saint Jean issued on Feb. 28, 2017. The company claimed to have received an order from Panasonic, with that order being part of an "offtake agreement to supply multiple tonnes of anode material monthly for a number of years." Mr. Ogilvie cheered the deal at length, calling it the company's "greatest accomplishment; to be recognized and awarded with an order to supply one of the world's best technology companies." Saint Jean said that it would make the first shipment within 90 days.

The problem, at least according to the ASC, was that the news release was entirely untrue. Panasonic had requested some material from Saint Jean for evaluation, but there was no supply deal involving regular shipments, as the news release implied. After the news, Saint Jean's price more than tripled, reaching 29.5 cents.

The company then issued a second news release, on March 3, 2017, in which it clarified that the order was nominal and that Panasonic had not signed a definitive agreement. Saint Jean still suggested that the deal was in the works, saying that the parties were working to finalize it "as soon as possible." The stock decreased sharply, closing at 15 cents that day.

After the second news release, the ASC began looking into the transaction, with an investigator contacting Panasonic. According to the ASC, a lawyer for Panasonic said that the company had no intention of entering into Saint Jean's agreement. Trading in Saint Jean was then halted until the company issued a third news release, dated March 20, 2017, in which it clarified its arrangement with Panasonic (which was an order for a five-kilogram sample, and nothing more).

In imposing the penalties on Mr. Ogilvie, the ASC found that his violation was serious, causing a substantial increase in Saint Jean's volume and price. The regulator also determined that he did not maliciously intend to mislead the market. The ASC opted for a more charitable description of his behaviour, saying that it reflected "wishful thinking, over-confidence, or hubris." The ASC further acknowledged that there was no evidence of Mr. Ogilvie receiving a direct financial benefit.

For his part, Mr. Ogilvie argued that he was not solely responsible for the news release. He said that it was the product of discussion amongst the company's management. As he saw things, he should not have been held personally liable.

Unfortunately for Mr. Ogilvie, the ASC did not accept his explanation. The panel hearing the case noted that he was the company's senior officer, and much of the problematic material was contained in quotes attributed to him. The panel also heard evidence from other directors or officers who testified that Mr. Ogilvie was primarily responsible for the news releases.

For Saint Jean shareholders, the finding against Mr. Ogilvie comes with the stock still trading for pennies. The company, now known as Volt Carbon Technologies Inc., closed at seven cents Thursday, unchanged. The company was also a respondent in the ASC case, which it settled by paying $50,000. Mr. Ogilvie is no longer with the company.

As for the graphite sample, Panasonic did eventually perform its evaluation. It informed Mr. Ogilvie that the material had some satisfactory qualities, but there was a "deficiency in discharge." Mr. Ogilvie attempted to get an explanation, but received no response. There was no further communication with Panasonic.